The auto-components industry accounted for 2.3 per cent of India’s Gross Domestic Product (GDP) in 2017-18. During the same period, 1.5 million people directly and 1.5 million people indirectly were employed in the auto-components industry. The auto components sector has been observing robust growth with a turnover of US$ 51.2 billion in FY18 and turnover is anticipated to reach US$ 200 billion by FY26. India's exports of auto components could account for as much as 26 per cent of the market by 2021. Auto-component production in 2018-19 is expected to increase 12-14 per cent in FY19, on the back of robust growth in domestic and export markets.*

Favourable government policies such as Auto Policy 2002, Automotive Mission Plan 2016-2026, National Automotive Testing and R&D Infrastructure Projects (NATRiPs), have helped the Indian auto components industry achieve considerable growth. The government has also extended the FAME Scheme from September 2018 to March 2019.

India is emerging as global hub for auto component sourcing. A cost-effective manufacturing base keeps costs lower by 10-25 per cent relative to operations in Europe and Latin America. Relative to competitors, India is geographically closer to key automotive markets like the Middle East and Europe.

Investments and expansions in the Indian Auto component sector-

In October 2018, the company inaugurated its second largest manufacturing facility in the Asia Pacific region. The company is planning to expand its product and technical offering over the course of the next few years.

As of September 2018, air-compressor manufacturer Elgi Equipments is going to invest Rs 18 crore (US$ 2.56 million) for setting up of a motor production facility in India. The facility is expected to be commissioned in Q1 FY20.

As of August 2018, Rico Auto Industries is developing plans to invest Rs 400 crore (US$ 57.00 million) in the next three years.

In August 2018, the Board of Directors of Amara Raja Batteries approved setting up of a Rs 700 crore (US$ 99.74 million) greenfield automotive battery plant with a production capacity of 6.5 million units per annum. As of October 2018, the company decided to further enhance the capacity of the plant to 10.8 million units in phases.

In August 2018, JK Tyre and Industries Ltd inaugurated its state-of-the art global technology centre in Mysore. Research at the centre will focus on various aspects of tyre technology including coming up with advanced laboratory predictors for tyre performance and recognising key inputs for life prediction of rubber products.

As of August 2018, Rico Auto Industries is soon going to sign a Joint Venture (JV) deal with HZ Manufacturing to produce automatic transmission for scooters.

In July 2018, air-compressor manufacturer Elgi Equipments acquired Pulford Air and Gas based in Sydney, Australia. The acquisition will help the company to expand its global footprint and help in achieving its mission of becoming a leading player in the global air-compressor market by 2027

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